This file includes files and videos that describe how to build a leveraged buyout model. The series begins with a simple LBO model and moves to more complex modelling and finance issues.
Simple LBO Model
The first set of videos describe very simple LBO models where you can enter various equations and check your work. It is for people who are just beginning to model. These basic models demonstrate the importance of including sources and uses of funds in any analysis to get things started.
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The files that are associated with these two videos are available for downloading below. I have also included some powerpoint slides that describe some to the financial issues associated with LBO’s (some of these slides are old and out of date).
The file below illustrates how results of the LBO in terms of returns to equity investors are affected by the capital structure, the exit value assumptions and the holding period. The file uses the ABC loan assumption with amortising debt, bullet debt and capitalising debt.
Cash Sweep Modelling in LBO’s
The second set of videos address how cash sweeps work in the context of LBO’s. The issue of circular references is addressed and techniques that apply user defined functions to resolve the circular references are described.
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The next two videos explain how to create user defined functions to resolve circular references associated with cash flow sweeps. The first video does not include taxes and the second video adds taxes to the process. The files associated with these videos are available for download below.
Detailed LBO Model with Quarterly Time Periods and Alternative Outputs that Measure Benefits of the Transaction
The set of videos below demonstrate more detailed issues associated with modelling an LBO as well as general modelling issues. You can download the file that is associated with the LBO model by pressing the button below.
Leverage Buyout Model with Quarterly Analysis and Alternative Output Presentation
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